Philippines - Tarlac Irrigation Systems Improvement Project : Loan 1080 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1080 PH Loan Agreement (Tarlac Irrigation Systems Improvement Project) BETWEEN REPUBLIC OF THE PHILIPPINES AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JANUARY 27, 1975 CONFORMED COPY LOAN NUMBER 1080 PH Loan Agreement (Tarlac Irrigation Systems Improvement Project) BETWEEN REPUBLIC OF THE PHILIPPINES AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JANUARY 27, 1975 LOAN AGREEMENT AGREEMENT, dated January 27, 1975, between REPUBLIC OF THE PHILIPPINES (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "NIA" means the National Irrigation Administration, an agency established by the Borrower's Republic Act No. 3601 as amended by Presidential Decree No. 522; (b) "Tarlac irrigation systems" means the Camiling River Irrigation System, the San Miguel-O'Donnell River Irrigation System, and the Tarlac River Irrigation System collectively; (c) "Project Area" means an area of about 34,000 hectares, located mainly in Tarlac province with small portions located in Nueva Ecija and Pangasinan provinces, now served by the Tarlac irrigation systems and to be served by such systems as proposed to be expanded; (d) "UPRP" means the Upper Pampanga River Project described in Schedule 3 to the Loan Agreement between the Borrower and the Bank dated August 18, 1969 (loan number 637 PH); and (e) "Penaranda irrigation system" means the PENRIS as defined in Section 1.01(g) of the Development Credit Agreement between the Borrower and the International Development Association dated May 14, 1974 (credit number 472 PH) and as proposed to be expanded in Schedule 2 thereto. 4 ARTICLE H The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to seventeen million dollars ($17,000,000). - Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule may be amended from time to time, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for the carrying out of works or services (other than consultants' services) for the Project shall be awarded in accordance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1980 or such other date as shall be agreed between the Borrower and the Bank. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eight per cent (8%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on April 15 and October 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Set,ion 3.01. The Borrower shall carry out the Project through its NIA with due diligence and efficiency and in conformity with appropriate financial, 5 administrative, engineering and agricultural practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. In order to assist the Borrower in carrying out Part B and Part D of the Project, the Borrower shall, within three months from the date of this Agreement or within such other period as may be agreeable to the Bank, cause NIA to employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. The Borrower may also cause NIA to employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank in order to assist the Borrower in carrying out Part C(l) of the Project. Section 3.03. (a) In carrying out Part A, Part B(3), and Part C(2) of the Project, and to the extent contractors are employed therefor, the Borrower shall employ or cause NIA to employ contractors whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank. (b) The Borrower shall cause NIA to investigate ways of increasing the portion of Project civil works done under contract. (c) The Borrower shall also cause NIA, as and when required for its increased tasks under Parts B and D of the Project, to employ appropriately qualified additional personnel in the Project Development Division of NIA. Section 3.04. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, all goods and services financed out of the proceeds of the Loan shall be used exclusively for the Project until its completion. Section 3.05. (a) The Borrower shall furnish, or shall cause NIA to furnish, to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction, work and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower shall, or shall cause NIA: (i) to maintain records adequate to record the progress of the Project (including the cost thereof) and 6 to identify the goods and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (ii) to enable the Bank's accredited representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) to furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds. Section 3.06. (a) The Borrower shall grant all water rights required to enable NIA to carry out and operate the Project and shall take such action as is required to ensure that no private rights are granted which could adversely affect the water supply for the Project. (b) The Borrower shall take or cause to be taken all such action as shall be necessary to acquire as and when needed all such land and rIhts in respect of land as shall be required for carrying out the Project. Section 3.07. Without limitation of its obligations under Section 3.01 of this Agreement, the Borrower shall establish and maintain, under arrangements satisfactory to the Bank, a Special Fund from which NIA may draw without restriction to meet expenditures in respect of the Project. The Borrower shall adjust and replenish the amount in the Special Fund at monthly intervals to a level at least equivalent to the estimated amount of payments to be made for goods and services required for the Project, less the estimated amount of payments to be made directly by the Bank to suppliers, consultants, or contractors for such goods and services, during the next three months' period. ARTICLE IV Other Covenants Section 4.01. (a) It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. (b) To that end the Borrower (i) represents that at the date of this Agreement no lien exists on any governmental assets as security for any external debt except as otherwise disclosed in writing by the Borrower to the Bank, and (ii) undertakes that, except as the Bank shall otherwise agree, if any such lien shall be created, it will ipso facto equally and ratably, and at no cost to the Bank, secure the payment of the principal of, and interest and other charges on, the Loan and in the creation of any such lien express provision will be made to that 7 effect. The Borrower shall promptly inform the Bank of the creation of any such lien. (c) The foregoing representation and undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. As used in this Section, the term "governmental assets" means assets of the Borrower or of any agency of the Borrower including the Central Bank of the Philippines or any institution performing the functions of a central bank for the Borrower. (d) The Borrower further undertakes that, within the limits of the laws in force in its territories, it will make the foregoing undertaking effective with respect to liens on the assets of its political subdivisions and their agencies, and to the extent that the Borrower is unable within the limits of the laws in force in its territories to make this undertaking effective, the Borrower will give to the Bank an equivalent lien satisfactory to the Bank. Section 4.02. (a) The Borrower shall cause NIA to maintain separate records adequate to reflect in accordance with consistently maintained appropriate accounting practices its operations in respect of the Project. (b) The Borrower shall cause NIA to: (i) have its accounts and financial statements in respect of the Project (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable Lo the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than four months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of NIA and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. (a) The Borrower shall cause the works and facilities included in the Project to be operated and maintained in accordance with sound agricultural, engineering and financial policies and practices, and shall make available sufficient funds to NIA for such purposes. 8 (b) Without limitation of its obligations under paragraph (a) of this Section, the Borrower undertakes to do, or, to the extent required, to cause NIA to do, the following: (i) to make adequate budgetary provision to operate and maintain the Project; and (ii) except as the Bank shall otherwise agree, to take all necessary action to ensure that charges for the use of irrigation water are levied and collected from the users of the Project and that such charges will provide NIA with revenues sufficient to cover all operating and maintenance costs of the Project, and, in addition, to provide for the recovery, within a period not greater than 50 years, on reasonable terms and conditions satisfactory to the Bank, of the monies invested in the Project, without impairing the users' incentives and capacity to pay. (c) The Borrower shall cause NIA to carry out, and operate and maintain the works and facilities in, Part A of the Project through its UPRP office or under other arrangements within NIA satisfactory to the Bank. Section 4.04. The Borrower shall take all necessary action to ensure that irrigation water in the San Miguel-O'Donnell River Irrigation System withdrawn from the San Miguel main canal for the use of the Hacienda Luisita sugar estate and the Central Azucarera de Tailac shall continue to be returned to the system and made available for use by farmers located downstream of the Hacienda Luisita sugar estate. ARTICLE V Effective Date; Termination Section 5.01. The establishment of the Special Fund referred to in Section 3.07 of this Agreement is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01(c) of the General Conditions. Section 5.02. The date April 27, 1975 is hereby specified for the purposes of Section 12.04 of the General Conditions. 9 ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Secretary of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Secretary of Finance Department of Finance Manila, Philippines Cable address: SECFINANCE Manila For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. 10 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF THE PHILIPPINES By /s/ Eduardo Z. Romualdez Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s / Bernard R. Bell Regional Vice President East Asia and Pacific 11 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan /. " ated % of (Expr - d in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works (a) mobiliza- 1,600,000 100% of foreign tion and con- expenditures struction equipment and vehicles for civil works contractors (up to 50% of the value of each contract) (b) other civil 8,900,000 43% works (2) Equipment (includ- 3,700,000 ing vehicles) (a) directly im- 100," of foreign ported equip- expenditures ment (b) locally manu- 100% of local factured equip- expenditures ment (ex-factoiy) (c) imported equip- 65% ment procured locally 12 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (3) Consulting ser- 1,000,000 100% of foreign vices and over- expenditures or seas training 60% of total expenditures (4) Unallocated 1,800,000 TOTAL 17,000,000 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures for goods or services supplied from the territory, and in the currency, of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower, and for goods or services supplied from, the territory of the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if any event occurs which shall affect the amount of any such taxes included in the cost of any item to be financed out of the proceeds of the Loan, the Bank may, by notice to the Borrower, correspondingly adjust the disbursement percentage then applicable to such item. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph I above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, 13 the Bank may, by notice to the Borrower: (i) reallocate to such Category to the extent required to meet the estimated shortfall proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. 14 SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Upgrading, Rehabilitation, and Expansion of Existing Tarlac Irrigation Systems (1) The repair of existing canals and structures and the provision of additional control structures, turnouts, and collector drains; (2) the construction of additional irrigation and drainage works to serve about 13,000 hectares of land adjacent to the existing service areas of the Tarlac irrigation systems; (3) the construction of small buildings for use by water management technologists approximately in the ratio of one for each 500 hectares of irrigated land in the Project Area; and (4) the upgrading of existing roads and the construction of additional roads in the Project Area, including roads for operation and maintenance along main canals and laterals. Part B. Groundwater Pilot Project (1) The investigation of the aquifer system in the area of each of the Tarlac irrigation systems as proposed to be expanded in order to evaluate recharge, discharge and storage capabilities as well as groundwater movement, to evaluate the technical and economic feasibility of dry season irrigation by groundwater pumping, and to assess the potential for conjunctive use of surface and groundwater resources in the area of each system; (2) the training of NIA staff in groundwater hydrology and well drilling techniques; (3) the selection of about three pilot areas of about 300 hectares each for the Tarlac irrigation system, and the construction in each such pilot area selected of about six production wells and necessary laterals and farm ditches for connection with the gravity systems, and the installation of specialized equipment for operating, monitoring, and evaluating each pilot area; and 15 (4) the preparation of an evaluation report after operation of pilot areas for about two years, including, if warranted on the basis of the evaluation, a framework plan and preliminary cost estimate for conjunctive use of surface and groundwater in the area of each system. Part C: Water Management Training (1) The training of about 300 water management technologists in water management methods, rice production techniques, and farmer organization for the UPRP, Penaranda and Tarlac irrigation systems; and (2) the provision of facilities for such training in each of the three existing UPRP operational districts, in the existing Penaranda irrigation system operational district, and in an operational district for the Tarlac irrigation systems. Part D: National Irrigation Systems Improvement Study The inventory of existing NIA irrigation systems, the selection of an area of about 150,000 hectares of highest priority for improvement, the completion of four feasibility grade studies considering, inter alia, economic factors, institutions and income levels in the area, and the review of the organization and implementation capacity of NIA's regional offices. Part E: Equipment and Vehicles The procurement of equipment and vehicles in connection with the carrying out of the other Parts of the Project. The Project is expected to be completed by December 31, 1980. 16 SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* April 15, 1982 220,000 October 15, 1982 230,000 April 15, 1983 235,000 October 15, 1983 245,000 April 15, 1984 255,000 October 15, 1984 265,000 April 15, 1985 275,000 October 15, 1985 290,000 April 15, 1986 300,000 October 15, 1986 310,000 April 15, 1987 325,000 October 15, 1987 335,000 April 15, 1988 350,000 October 15, 1988 365,000 April 15, 1989 380,000 October 15, 1989 395,000 April 15, 1990 410,000 October 15, 1990 425,000 April 15, 1991 445,000 October 15, 1991 460,000 April 15, 1992 480,000 October 15, 1992 500,000 April 15, 1993 520,000 October 15, 1993 540,000 April 15, 1994 560,000 October 15, 1994 585,000 April 15, 1995 605,000 October 15, 1995 630,000 April 15, 1996 655,000 October 15, 1996 685,000 April 15, 1997 710,000 October 15, 1997 740,000 April 15, 1998 770,000 October 15, 1998 800,000 April 15, 1999 830,000 October 15, 1999 875,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar eqnivilents determined as for purposes of withdrawal. 17 Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05(b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 3/4% More than three years but not more than six years before maturity 2-1/4% More than six years but not more than eleven years before maturity 3% More than eleven years but not more than sixteen years before maturity 4-3/4% More than sixteen years but not more than twenty- one years before maturity 6-3/4% More than twenty-one years but not more than twenty-three years before maturity 7-1/2% More than twenty-three years before maturity 8% 18 SCHEDULE 4 Procurement A. General Procedures 1. Except as provided in Part A.2 hereof, contracts shall be let under procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in April 1972, as revised in October 1972 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. Notwithstanding the provisions set forth or referred to in Part A.1 of this Schedule: (i) civil works may be carried out either (A) by NIA under force account, or (B) by contract awarded under procedures consistent with the Guidelines, but without international competitive bidding, provided that the aggregate cost of civil works carried out by force account shall not, without prior consent of the Bank, exceed 20% of the total cost of all civil works in the Project; and (ii) any contract for the procurement of equipment, materials, supplies and vehicles not exceeding the equivalent of $10,000 may be awarded on a competitive basis consistent with the Borrower's normal procurement practices without international competitive bidding, provided that the aggregate expenditure for such items so procured shall not exceed the equivalent of $250,000. B. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 19 2. Goods manufactured in the Republic of the Philippines may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in the Republic of the Philippines if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added therein equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in the Republic of the Philippines. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. The lowest evaluated bid of each group shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid, or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the lowest evaluated bid from group C shall be selected. 20 C. Review of Procurement Decisions by Bank 1. With respect to all contracts for civil works estimated to cost the equivalent of $100,000 or more and all contracts for equipment and vehicles estimated to cost the equivalent of $50,000 or more: (a) Review of prequalification. If bidders are required to prequalify, the Borrower shall, before qualification is invited, inform the Bank in detail of the procedure to be followed and shall introduce such modifications in that procedure as the Bank shall reasonably request. The list of prequalified bidders, together with a statement of their qualifications and of the reasons for the exclusion of any applicant for prequalification shall be furnished by the Borrower to the Bank for its comments before the applicants are notified, and the Borrower shall make such additions to, deletions from, or modifications in, the said list as the Bank shall reasonably request. (b) Review of invitation to bid and of proposed awards and final contracts. (1) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (2) Promptly after the bids have been received, the Borrower shall inform the Bank of the names of the bidders and the respective amounts of the bids. (3) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and the reasons for the intended award and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the recommendation for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 21 (4) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (5) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Loan and not governed by paragraph I of this Part, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copic. of such contract, together with the analysis of bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.